Charlie Banks retires

Charlie Banks retired at the end of the financial year, following 39 years with Ferguson and Wolseley, the last five as Group Chief Executive. Here is his parting message.

“It has been an honour and a privilege to have been associated with Wolseley for so many years. In my time as Group CEO, we saw sales almost double in size and both the share price and EPS rise dramatically. It has been an amazing journey.

None of our achievements would have been possible without the continued support of our shareholders and debt providers. I am also grateful to the Board for giving me the opportunity to lead this great company and to our employees, without whose unswerving commitment we would not have been able to execute our strategy and deliver such exceptional growth.

I know that we have laid the foundations for continued success in the coming years and I have total confidence in Chip Hornsby and his team to lead Wolseley to new and even greater heights.”

Organic growth and acquisitive growth

We have just appointed Adrian Barden, previously Managing Director of our UK business, to a newly created position to lead our global M&A efforts. This will bring even more focus to our acquisition processes, in a more competitive market, including developing a target base of acquisition opportunities on both continents, establishing a formalised integration process of acquisitions into the Group and refining our post acquisition performance review process.

Sourcing

We are elevating sourcing to a higher level to deliver the right products to our customers. This will include responsibility at the Group level for the top 30-50 suppliers, which will be coordinated with both the continental groups.

We want to identify and drive low cost country/ own brand/ proprietary brands throughout the entire Group so that this will be a significantly larger portion of our business within the next two to three years. Indirect spend initiatives will also deliver cost savings across our business.

Supply chain

We are developing a format such that supply chain becomes a distinct competitive advantage across the Group. Simply put, our intent is to have the broadest product offering with the highest fill rates of anyone in the industry. We believe that the right combination of sourcing and supply chain will become a significant competitive advantage.

Business improvement

Our aim over the next several years is to continually improve our net margin by focusing on a number of growth and cost reduction initiatives. In looking at the longer term, increased focus on efficiency and productivity throughout the entire Group will bring great benefit in improving our overall net margin. The utilisation of information for the benefit of customer service and productivity will be at the forefront of this initiative, but it is certainly not limited to that aspect alone.

The future

So what are my objectives for our organisation in the immediate future? We are still focused on delivering double-digit sales growth - but now with a greater emphasis on margin improvement and the new leadership structure is designed to allow us to build on our experience and our scale.

Our customer base runs into millions - every one of them with individual needs, being serviced by our front line staff. Above all, this is a relationship business and the only way to make it work is by serving local customers, locally. We will continue to go out of our way to try and help our customers succeed - we make their problems our problems and we work with them to find solutions. Loyal customers provide repeat business and increasingly more business, as the amount of product they buy from us increases.

We are also making it easier to do business with us at all levels. In the USA and the UK we have structured our branches into focused "business groups" (USA) or "core brands" (UK) to put a real emphasis on a particular sector, customer or product range. Results from the businesses structured this way show significant organic growth, so it's a model we are extending across the Group. This single point focus on specific customer groups, be they plumbers, electricians, roofers, or general contractors, means our customers know what they can expect. Our team of people are real subject and product experts, the products are relevant to the requirement and the customer remains loyal.

Looking ahead

We have huge potential for further growth. As you will see in our Performance review the size of our potential market is vast and despite our success we still have only a relatively small share.

Look across the 19 countries where we currently operate and you'll find that we are in just about every sector of construction materials somewhere - but we don't as yet provide a complete offering anywhere. Even without moving beyond Europe and North America, there are significant opportunities for our businesses to share knowledge and learn from each other's experiences in order to extend our product range and introduce ourselves to new customers.

In conclusion, I would like to thank the Board and you, our shareholders, for giving me the opportunity to lead this great company. I believe we have a tremendous future ahead of us and with the continued loyal commitment of our outstanding 70,000 plus strong team, without whom we would be nothing, we can look to the future with confidence. We are committed to making Wolseley "the name the world builds on".

Chip Hornsby

Group Chief Executive